Mumbai: Promoters of more than 100 Indian companies increased their stakes by over a percent as the Narendra Modi wave caught up Dalal Street last year.
Other than the foreign institutional investors (FIIs), the Indian companies bought much higher number of shares as they confided in the Narendra Modi-led BJP government which came into power in 2014.
While some of them raised their holdings through open market purchases, others did it by buying back shares or subscribing through rights issues or through warrants.
According to an Economic Times report, it was the optimism surrounding due to the new government that led to promoters to raise their holdings.
50 companies out of the 100, in which the promoters raised their stakes, are from NSE's 500 index. Their values could not be ascertained as they happened at various points and prices.
During 2014, there were 10 buybacks, 21 open offers and 14 rights issues. While some companies like United Spirits, Glaxo SmithKline Pharmaceuticals, Sterling Holiday Resorts (India) and a few others launched open offers, promoters of many other companies like Sesa Sterlite, JSW Steel, Jindal Steel, Welspun India etc. have increased their stakes by buying shares in the open market through the creeping acquisition.
This way, as told by the experts, the promoters can increase their stakes in the companies by buying up to 5% from the open market every year.
Promoters of Cairn India, Mastek and UPL, among others, increased their stakes through buybacks.
Daljit Kohli, Head of research Indianivesh said, “Promoters of many companies started increasing their stake early last year when the market had also started building expectations on the changing political scenario.”
He added that the promoters who have all the information about their company believe that investing in it is better than putting money somewhere else.
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